Success Factors in Title III Equity Crowdfunding in the United States

Abstract

Abstract

Success drivers of online equity crowdfunding campaigns

“…Although unanimity among research findings exists regarding the influence of several campaign features such as campaign videos (Li et al, 2016;Vismara et al, 2017), minimum investment size (Hornuf and Schwienbacher, 2017;Lukkarinen et al, 2016), and campaign updates (Angerer et al, 2017;Block et al, 2018b;Hornuf and Schwienbacher, 2018;Li et al, 2016), venture characteristics such as previous funding from experienced investors (Kleinert et al,. 2018;Mamonov and Malaga, 2018), as well as herding behavior (Hornuf and Schwienbacher, 2018;Vismara, 2018a;Vulkan et al, 2016;Åstebro et al, 2018), contradictory results prevail as well. For example, it remains unclear whether campaign duration (Lukkarinen et al, 2016;Piva and Rossi-Lamastra, 2018;Vismara, 2018), the portion of equity retained by the entrepreneurs (Ahlers et al, 2015;Ralcheva and Roosenboom, 2016;Vismara, 2016), or intellectual property rights (Ahlers et al, 2015;Kleinert et al 2018;Piva and Rossi-Lamastra, 2018;Ralcheva and Roosenboom, 2016) influence funding success.…”

The Role of Information Technology in Fintech Innovation: Insights from the New York City Ecosystem

“…Focusing on the whether the startup offerings represent low-cost alternatives to existing services or entirely new offerings, we find that nine of ten startups (90%) in our sample are targeting lower price points in the respective markets, whereas only one startup -Cadre -is offering novel services. Cadre is a real estate investment platform that emerged in the wake of the JOBS Act passage that reduced regulator requirements in startup financing reporting and enabled equity crowdfunding as a practice [25]. The company is leveraging the regulatory changes to provide investors with novel investment opportunities that were previously only available to accredited investors [25].…”

“…Cadre is a real estate investment platform that emerged in the wake of the JOBS Act passage that reduced regulator requirements in startup financing reporting and enabled equity crowdfunding as a practice [25]. The company is leveraging the regulatory changes to provide investors with novel investment opportunities that were previously only available to accredited investors [25]. The results are summarized in Table 1 below.…”

Digital Entrepreneurship in Two-sided Markets. Insights from Real Estate Crowdfunding Platforms.

“…Similarly, OnDeck began as a business-to-business (B2B) marketplace for business loans and evolved to include individual investors as an important source of capital on the platform [29]. There are two important distinctions between debt and equity-based crowdfunding platforms in terms of the investor risk/reward profile [27]. Debt-based crowdfunding platforms typically offer a fixed interest rate and repayment term (commonly 6-18 months), whereas equity-based crowdfunding generally offers little certainty for potential investors because new ventures typically take 5-7 years to return capital to investors and many entrepreneurial ventures lead to partial or complete loss of the investment [56].…”